The Compound Annual Growth Rate (CAGR) is a useful measure of the growth rate of an investment or value over a specific period of time, assuming the gain was compounded annually. It's an invaluable tool for comparing the historical performance of investments or predicting future growth.
Future Worth of One, also known as Compound Amount of One, refers to the value of a single sum invested at a specific interest rate over a set period. It helps in understanding how much a present value amount will grow over time when subjected to compound interest.
The Rule of 72 is a simple formula used to estimate the number of years required to double the principal amount of money invested at a given annual rate of compound interest. By dividing the number 72 by the annual interest rate, investors can quickly gauge the growth period needed for their investment to double without using complex calculations.
